White House adds muscle to patent reform push

The tech industry finally got the word it had been waiting for out of Washington on patent reform. Now it just has to watch — and hope — for results.

The White House initiative officially unveiled Tuesday represents the biggest step yet by President Barack Obama to jump into the patent wars that have absorbed the industry. The president’s package of executive actions and legislative recommendations, if enacted, tips the scales to give advantage to those fighting abusive patent litigation threats, say some in the tech industry.

Text Size

-

+

reset

An administration official speaking on background said the package is “specifically designed to deal with abusive patent litigation,” which he said is now distracting innovators from what they should be spending their time on — running companies and working on new products.

But a big part of where things head will depend on Congress.

In recent weeks, members of both chambers, including the chairmen of both the House and Senate Judiciary committees, have discussed ways to reform patent litigation. Bills include those by Sens. Chuck Schumer (D-N.Y.) and John Cornyn (R-Texas) as well as Rep. Ted Deutch (D-Fla.). Reps. Peter DeFazio (D-Ore.) and Jason Chaffetz (R-Utah) also have reintroduced the Shield Act this session.

Rep. Bob Goodlatte (R-Va.), who lauded the White House announcement, said he wants patent reform to get through the 113th Congress but did not reveal a specific time frame.

The House Judiciary Committee chairman said he hoped patent reform this time would not be a repeat of the last effort’s multiyear process. “The time frame is, we want to afford people the opportunity to give us input,” he said. “This is a new approach, a new initiative and it’s coming together very quickly but we don’t know how long it will take but we hope not too long.”

House Judiciary Democrats seemed not thrilled with the White House proposal.

The administration official said he sees patent reform “as an encouraging avenue for bipartisan legislation. It’s always the right time to pursue bipartisan legislation that will help job growth and innovation.”

The White House proposes seven legislative changes that offer solutions to problems faced by large and small companies, consumers and other technology users. The proposals include requiring patentees and applicants to divulge the “real party of interest” in a patent, which some say would help the problem of patent owners obscuring which entity is pursuing litigation. The package also offers protections to consumers and retailers against litigation threats.

The administration supports giving courts more discretion in awarding fees in abusive cases, which could result in cutting down the number of cases. It does not go as far as the Shield Act, which would require losers to pay legal fees.

“We are pretty darn close,” DeFazio said after the White House announcement. “They are proposing some changes that would be helpful and maybe we should go further and be more definitive.”

In 2011, the president signed the America Invents Act, a package of patent reforms negotiated over several years. The conventional wisdom at that time was that while tech didn’t get as much as it wanted, Congress would not turn to patent reform for some time.

But the tech industry has lobbied heavily for reforms. Patent litigation is up, and the blame has fallen on patent-assertion entities, companies often derided as “patent trolls.” They made up 62 percent of patent cases filed in 2012, up from 46 percent the previous year, according to research cited by an administration report released Tuesday.